USD/TRY Accelerates to New Highs in 2022 Near 16.80

  • USD/TRY is posting new year-to-date highs near 16.80.
  • The strong recovery of the dollar pushes spot higher.
  • The results of Turkey’s Treasury cash balance come later.

The greenback’s broad and strong rating motivates USD/TRY to go further and reach new highs of 2022 around 4:80 p.m. Tuesday.

USD/TRY: The next uptrend is the all-time high past 6:00 p.m.

USD/TRY adds to the positive start to the trading week and navigates the 16.70/80 band, or new year-to-date highs, so far this year.

The pair’s upward movement remains well supported by the bullish momentum around the greenback ahead of the FOMC rally next week. Indeed, the better performance of the US dollar weighs on the risk complex and supports exits from the FX space of emerging markets and the rest of dollar-denominated assets.

In the Turkish calendar, the Treasury cash balance for the month of May is due later in the session.

What to look for around TRY

USD/TRY maintains the underlying bullish bias well and solidly and is now approaching the vicinity of 17.00, an area last traded in December 2021.

So far, the Turkish currency’s price action is expected to revolve around the performance of energy prices, general trends in risk appetite, the path of Fed rates and developments in the war in Ukraine.

The additional risks TRY faces also come from the domestic backyard, as inflation shows no sign of abating, real interest rates remain anchored in negative numbers, and political pressure to keep the CBRT tilted to the upside. low interest rates remain pervasive.

Main events in Turkey this week: Unemployment rate (Friday).

Significant problems on the rear boiler: Foreign exchange intervention by the CBRT. Progress (or lack thereof) of the new government program to support the lira via protected term deposits. Constant pressure from the government on the CBRT in relation to the credibility/independence of the bank. Geopolitical crises. Structural reforms. Upcoming presidential/parliamentary elections.

USD/TRY key levels

So far the pair is gaining 1.14% to 16.7521 and facing the next upside barrier at 16.7713 (7th June 2022 high) followed by 18.2582 (all time high from 20th December) then from 19.00 (round level). On the other hand, a break of 16.3136 (June 3rd monthly low) would target 16.1431 (May 27th low) and finally 15.6684 (May 23rd low).